An Insurance Company Is Considering Using Independent Sales Agents Who

question 287

Multiple Choice

An insurance company is considering using independent sales agents who would receive a 7 percent sales commission on sales or its own insurance salespeople who would receive a 5 percent commission, salaries, and benefits. Additionally, with a company salesforce, sales administration costs would be incurred for a total fixed cost of $650,000 per year. At what level of sales would independent salespeople be less costly to the firm?

• A) $650,000
• B) $3,250,000
• C) $6,500,000
• D) $32,500,000
• E) $35,200,000

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Definitions:

Subliminally Flashed

Presentation of stimuli below the threshold of conscious perception, used to influence thoughts, feelings, or actions without awareness.

Sense The Presence

The feeling or perception that someone or something is in a certain place without any direct sensory evidence.

Instinctive Behavior

Actions or reactions that an organism is genetically predisposed to perform without the necessity of learning or experience.

Entire Species

A group comprising all individuals capable of interbreeding and producing fertile offspring, typically sharing common characteristics and genetically distinct from other groups.